The Co-op: retailer in context

  • The Co-op is one of the largest co-operative businesses in the world, offering a wide range of services including food, financial services, funerals and legal services
  • The co-operative model is different to the way most retailers do business: co-operative organisations are owned by members and run to meet their needs; members have say in how the business operates and is governed
  • The Co-op is a leading convenience food retailer and aims to be number one in the UK
  • The Co-op's priority is to meet the needs of the customers and communities that it serves

Strategic priorities

The Co-op only operates in the UK and serves members and customers through five businesses that make up the group: Co-op Food, Co-op Funeralcare, Co-op Insurance, Co-op Electrical, Co-op Legal Services.

The Co-op's vision of 'Stronger Co-op , Stronger Communities'  is based on a virtuous circle where building a better business means Co-op can better support its customers and the communities in which they live, who in turn will help grow the business further.  This demonstrates how Co-op is driven by social commitment, whilst being focused on the need to create long-term commercial value.

The Co-op difference of "championing a better  way  of doing business for you and your communities" blends traditional ideals with up-to-date thinking and aims to address modern needs in a co-operative way.

Longer term, Co-op's aim is to get closer to its members and customers: 

  1. Closer to where they are - digitally and physically
  2. Closer to what they need - good food, friendly people, easy shops
  3. Closer to what they care about - ethics, values and community
Strategic priorities  
A competitive offer with a Co-op difference that attracts more customers and members

  • High quality products, responsibly sourced underpin the Co-op difference of shared value
  • New relationships with local butchers, brewers and ice-cream makers have been forged in response to member requests for more local product innovation
  • British sourcing is key in fresh categories: only British meat in own label ranges; extending British seasons commitment on fruit and veg as a part of a plan to spend £2.5bn on British Farm produce (2017-19); also a focus in flowers, fish, produce and dairy
  • Switching to Fairtrade products, such as tea, coffee and bananas, as ingredients in own brands
  • Aiming make 80% packaging recyclable by 2020 and 100% long term
  • Also aware that value is important to many of its members and customers: considerable investment made to cut the cost of everyday food; reviewing the cost base of all parts of the business in order to release funds for re-investment into strategic areas
  • Continue to make own brand ranges better, especially the food-to-go range
  • Maximising opportunities to expand the reach of Co-op brands through Costcutter and Nisa wholesale deals
  • Co-op's 'Live and Local' team's hyper-local focus takes stores to new communities, including partnerships with Parkrun and Live Nation music festivals
  • Co-op currently has one of the oldest average age profiles of any UK convenience retailer (49) and is placing particular emphasis on attracting younger shoppers

New business opportunities that extend reach and create value

  • Co-op is focused on providing more convenient and accessible services to members and customers via a number of different routes:
    1. Expanding its estate
    2. Extending the reach of its brand
    3. Acquiring new businesses
  • 100’s of new convenience store openings are planned over the next few years, as well as the redevelopment of existing stores
  • Costcutter and Nisa wholesale deals expand the reach of the Co-op brand and extend buying power 
  • A franchise store model has been developed for independent retailers to roll out stores to new communities faster 
  • Co-op Ventures, an innovation unit to develop challenger brands and disrupt markets, was established in 2018. It is targeting acquisitions in markets using digital platforms that will allow Co-op to learn quickly and build on existing strengths while keeping investment modest and limiting risks (initially healthcare and money). Dimec, a pharmacy tech company, was its first purchase in September 2018.

An agile, lean, safer and connected business
  • Governance is a key priority , ensuring Co-op is kept well-run while keeping it’s community and member focus
  • Putting brand consistency at the fore by being ‘One Co-op’ in how it thinks, acts and talk to customers and members
  • Re-organising the internal structure to streamline and simplifying decision-making so that it is better able to respond quickly to fast changing markets and social trends
  • Piloting integrated Co-op and Nisa commercial teams to simplify the relationship for suppliers: one conversation, delivered via Co-op or Nisa route to market
  • Creation of new Co-op Service Centre to look after back-office functions (finance, IT, HR, customer/member helpdesks)
  • Using digital to bring Co-op closer to customers and members and making more use of membership data

Revitalising the membership proposition
  • Membership is central to Co-op’s thinking
  • Looking at new ways to connect with members including forums, blogs and social media
  • Looking at how to make more of membership data
  • Improving communication of 'shared value' - the Co-op difference
Greater impact from community work
  • Driving the concept of ‘shared value’ through its sourcing initiatives and the local charities and causes it supports
  • Focusing on initiatives to make communities stronger and more resilient
A joined-up story communicating the Co-op difference
  • ‘Closing the circle’ - improving communication of the Co-op difference of shared values
  • Continued investment in the network of ‘Member Pioneers’ who act as a bridge between the Co-op, and members and their communities
  • Fostering co-operation between local people and organisations – finding ways to bring people together to share ideas, skills and resources
  • Co-op research indicates high levels of neutrality to the brand from younger shoppers, so engaging with this key shopper group is particularly important to them

Colleagues that are proud to work there
  • Improving competitiveness of pay
  • Developing apprenticeship scheme 
  • New well-being initiatives
  • Aiming to be 'the nation's favourite business'

Key messages for suppliers

  • To maximise trading opportunities with the Co-op, suppliers need to be aware of its unique structure and priorities
  • Ensure that your supply chain can fulfill the Co-op's growing expectations in terms of availability and reach
  • The Co-op wants to work with food suppliers that share its high ethical and environmental standards
  • Be aware of the opportunities outside the core estate via the wholesale relationship with Costcutter and Nisa
  • The Co-op is looking to appeal to a younger shopper base.  This represents a clear focus where suppliers can engage with the Co-op.